RBA's Bullock says it's too soon to think about rate cuts
Adds quotes from Bullock, background
SYDNEY, Aug 16 (Reuters) -Australia's top central banker on Friday said it was premature to be thinking about rate cuts, adding underlying inflation was too high and that the board remained focused on potential upside risks to prices.
Appearing before lawmakers, Reserve Bank of Australia (RBA) Governor Michele Bullock said the board is of the view that it currently has the balance right between reducing inflation and maintaining gains in the labour market.
The central bank has held its policy steady since November, having raised the cash rate by 425 basis points to 4.35% since May 2022 to tame inflation as it sought to preserve jobs.
However, underlying inflation - which ran at 3.9% last quarter - is only expected to return to the 2-3% target band by the end of 2025, while the labour market remained tight even with the unemployment rate at 4.2%
"Circumstances may change, of course, and the outlook is uncertain," said Bullock. "But based on what the Board knows at present, it does not expect that it will be in a position to cut rates in the near term."
Bullock said the board was conscious of potential forecasting errors, but it was committed to be driven by the data and to adjust its assessment as necessary.
Markets are wagering on a 75% chance the RBA could cut by the year-end. 0#RBAWATCH
Reporting by Stella Qiu; Editing by Himani Sarkar and Sam Holmes
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